The Supreme Court instructed states to expedite clearances for Unitech’s housing projects following a plea from homebuyers to the Chief Justice of India. Deadlines have been set for states to ensure necessary approvals, enabling the construction of flats to begin. The directive aims to address delays and provide relief to affected homebuyers.
New Delhi: In a significant move to aid Unitech homebuyers, the Supreme Court on Wednesday established deadlines for various states where the Gurugram-based real estate firm has housing projects, mandating them to provide necessary clearances to resume construction.
A bench comprised of Justices Surya Kant and Ujjal Bhuyan issued these directives in a long-standing case concerning stalled residential projects by Unitech, with the last effective hearing occurring in December 2023.
The company underwent a change in its board of directors in 2020 after the Supreme Court dismissed the previous board due to findings from a forensic inquiry, which revealed substantial fund diversions.
However, little progress has been made since then.
This hearing came shortly after a homebuyers’ association from Chennai wrote to the new Chief Justice of India, Sanjiv Khanna, urging the expedited hearing of the case. On this letter, emphasizing the lack of resolution despite the Supreme Court’s involvement, contrasting it with the more advanced status of the Amrapali real estate case, where construction is nearing completion.
During Wednesday’s proceedings, the court allowed the new board of directors to obtain no objection certificates and environmental clearances from the governments of Haryana, Karnataka, Tamil Nadu, Uttar Pradesh, Punjab, and West Bengal, where Unitech has multiple projects. Specifically, the company has two projects in Ambala, two in Rewari, and 23 in Gurugram, along with four sites in Bengaluru, eight in Chennai, and 11 projects in Kolkata.
Additionally, permissions are required for five projects in Greater Noida and six residential complexes in Mohali, Punjab.
The bench also directed the Noida Real Estate Regulatory Authority (RERA) to approve the entire Unitech Golf Course Country (UGCC) project, which spans over 14 lakh square meters, without waiting for Unitech to settle its outstanding dues to the authority. This flagship project, located in Noida’s sectors 96, 97, and 98, was originally allotted to Unitech in 2006, with possession of flats in three societies Amber, Burgundy, and Willows scheduled for delivery by the end of 2013. However, construction has stalled due to payment disputes with the Noida Authority, which claims Unitech owes Rs 5,000 crore.
Despite some work commencing on a portion of the property, significant parts of the project have yet to begin, as the new board has resisted transferring land as demanded by the Noida Authority. Advocates M.L. Lahoty and Anchit Sripat, representing buyers invested in the UGCC, urged the bench to intervene to facilitate the project’s progress and ensure the delivery of high-cost flats to buyers.
Acknowledging their concerns, the bench instructed the Noida Authority to grant approval for the entire project and to file a compliance affidavit with the court.
The bench remarked in response to objections from the authority’s counsel,
“Dues can be taken care of later,”
Regarding two additional unfinished Unitech projects in Noida’s sectors 113 and 117, the bench stated it would address these matters later.
Moreover, the Supreme Court granted another opportunity to homebuyers who had previously sought refunds for their investments in Unitech projects but now wish to retain their booked flats. Although the initial deadline for this option had ended in November, the court has extended the deadline to December 31 for buyers to make their choice.
The case concerning Unitech’s stalled projects has been pending in the Supreme Court since 2018. Though a new board took charge in 2020 following the Court’s directive, there has been little on-the-ground progress regarding construction. According to the new board’s website, although tenders were issued for 71 of 81 incomplete residential projects, construction has only begun on 29. For commercial sites, tenders for nine out of 10 sites were awarded, but only eight have seen work begin.
The original plan involved 18,786 residential units and 1,860 commercial units. Currently, about 10,000 homebuyers are still waiting for possession, with many demanding refunds instead.
In December 2023, the Supreme Court allowed the new board to issue tenders for construction work, but despite over a dozen listings, the case was only heard in April 2024. On that occasion, the Court resolved a dispute between Unitech’s new board and the Noida and Greater Noida authorities over dues clearance.
The association’s letter points out that the lack of results from the Court’s intervention has severely hampered construction. Every significant step in the building process now requires the Court’s approval, further delaying timelines and keeping homebuyers in a state of uncertainty.
The association also criticized the Court’s decision not to award compensation for delayed flat deliveries, despite the original construction agreements providing for such compensation. This has added to the financial burden of families who have been paying both EMIs and rent for years without relief.
Iyarappan noted that homebuyers were penalized for missing payment deadlines, but the SC’s order has deprived them of compensation for delays, unlike buyers dealing with other builders.
The association also raised concerns about the safety of the stalled buildings, which have been left incomplete for years. It urges the CJI to acknowledge the “severe distress” caused by the delays and intervene to expedite the hearing process, emphasizing the need for a timely verdict to restore public faith in the judicial system.